A staggering 30% of Nigeria’s Micro, Small, and Medium Enterprises (MSMEs)—approximately 7.2 million businesses—shut down between 2023 and 2024 due to harsh economic conditions, according to the Nigerian Economic Summit Group (NESG). This economic downturn occurred under the administration of President Bola Tinubu.
NESG’s Chief Economist and Director of Research, Dr. Segun Omisakin, revealed these statistics during the launch of the 2025 Private Sector Outlook. He emphasized the country’s economic vulnerability, highlighting an estimated N94 trillion lost due to multinational divestments and business closures within the same period.
“Between 2023 and 2024, multinational divestments and business closures led to an estimated 94 trillion Naira economic loss. Additionally, 30% of Nigeria’s 24 million registered MSMEs shut down during this period, underscoring the country’s economic vulnerability,” Omisakin stated.
Despite an increase in foreign capital inflows and improved foreign exchange availability, the Nigerian currency significantly depreciated, averaging an exchange rate of 1,479.9 Naira to the US dollar in 2024. Furthermore, public debt rose to N142.3 trillion by September 2024, maintaining fiscal constraints.
Looking ahead to 2025, Omisakin urged businesses to adapt to economic uncertainties by implementing strategic resilience measures. NESG Board Director, Mrs. Wonu Adetayo, reiterated the private sector’s role in driving economic growth, acknowledging a 3.4% GDP expansion in 2024—the highest since 2021. However, she cautioned that stagnant productivity and persistent macroeconomic imbalances continue to hinder living standards.
At the event, panelists stressed the importance of policy stability over currency fluctuations, highlighting that foreign investors prioritize consistency in economic policies. They also called for stronger collaboration between the government and business associations such as the Nigerian Association of Small and Medium Enterprises (NASME), Nigerian Association of Small-Scale Industrialists (NASSI), and Nigeria Employers’ Consultative Association (NECA).
President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Dele Oye, stated: “Government must act as a facilitator, not a competitor, in economic affairs. Business organizations should always be involved in key negotiations to ensure broad-based economic benefits.”
AfDB’s $230 Million Boost for Nigerian SMEs
In a move to counter economic challenges, the African Development Bank (AfDB) is facilitating a $230 million trade finance package through Access Bank Plc to support Nigerian SMEs. This investment aims to improve access to foreign exchange, bolster trade, and enhance financial stability.
The funding package consists of:
- $170 million Trade Finance Line of Credit (TFLoC): A three-and-a-half-year loan designed to provide forex liquidity for SMEs, ensuring smoother operations and import payments.
- $60 million Transaction Guarantee (TG): A three-year protection plan for confirming banks against non-payment risks in trade finance transactions.
To ensure transparency, the funds will be managed under specific agreements, outlining utilization, repayment conditions, and compliance with environmental and social responsibility guidelines. Approval from the Central Bank of Nigeria (CBN) is required before disbursement to ensure alignment with local forex regulations.
This financial intervention is expected to spur SME growth, support women entrepreneurs, and improve access to essential imports, ultimately stabilizing Nigeria’s economic landscape.
While Nigeria faces significant economic hurdles, proactive policy adjustments, private sector inclusion, and strategic funding initiatives like AfDB’s $230 million package could help mitigate business closures and foster long-term resilience in the economy.
